Aug. 5 (Bloomberg) -- Oppenheimer Holdings Inc. will pay
$1.4 million to settle a brokerage industry regulator’s claims
that it had an inadequate anti-money laundering program and
failed to detect and report suspicious penny stock transactions.

The company’s brokerage unit failed to identify as “red
flags” sales of more than 1 billion shares of 20 low-priced,
highly speculative unregistered securities from August 2008 to
September 2010, the Financial Industry Regulatory Authority said
in a statement today. The firm also failed to conduct adequate
due diligence on a correspondent account of a broker in the
Bahamas, Finra said.

“Broker-dealers are required by federal securities laws
and Finra rules to monitor customers’ accounts so that those
accounts are not used for illegal activities, such as money
laundering and penny-stock schemes that can cause considerable
harm to investors,” Brad Bennett, enforcement chief for
Washington-based Finra, said in a statement.

Oppenheimer said in an e-mailed statement that it has
significantly tightened its policies relating to the sales of
low-priced shares and enhanced its review of clients’ sales with
respect to anti-money laundering oversight. The firm agreed to
settle without admitting or denying wrongdoing, Finra said.